Dual quality of products targeted by EU authorities

In the last couple of years several “new” EU Member States conducted tests and surveys aimed at comparing the composition of products advertised and sold under the same brand with almost identical packaging. One of the most recent surveys conducted by the Polish Competition Authority revealed that certain products offered in Poland, compared to the “same” products in Germany, differed in their composition. Generally, such differing products offered in Poland were of inferior quality and contained ingredients commonly considered as less healthy. The Polish Competition Authority declared to hand over results of the survey to the European Commission which is expected to address issues stemming from the dual quality of products and is currently coordinating similar surveys in the EU.

Counteracting the dual quality of products is one of the priorities considered in the Commission’s New Deal for Consumers proposal. The Commission plans to amend the Directive on unfair commercial practices to include marketing the “same” products in different EU Member States with differing compositions as a misleading commercial practice. In its recent resolution on the dual quality of products in the single market, the European Parliament noted that the Commission’s proposal may require further clarification since it includes unclear provisions. It suggested that legislative measures should clearly define the notion of dual quality and determine how the cases should be assessed.

Given the substantial engagement of EU authorities in investigations on the dual quality of products and the common agreement that this issue should be tackled at the EU level, one may rationally expect that it will soon be regulated by an EU Directive. This change will certainly bring benefits for consumers. At the same time, it may bring new hurdles for companies, in particular if the definition of dual quality remains vague. One may expect difficulties in determining whether the differentiation of products stems from legitimate adjustments of products to the preferences of consumers in the various EU Member States or whether it constitutes an unfair use of dual quality. In any case, the intervention of EU authorities into the marketing of products may raise doubts in the context of the freedom to pursue business activities. In particular, it seems reasonable that as long as the “same” products are properly labelled and their composition is described accurately, one should not consider their marketing as misleading. Also, EU authorities seem to disregard the differences in the purchasing power of consumers in EU Member States and their willingness to pay for products of a higher quality. It is remarkable that the majority of allegedly better quality products surveyed by the Polish Competition Authority were more expensive in Germany. It is also debatable whether different packaging of the same products marketed under the same brand would enable undertakings to circumvent the prohibition on the dual quality of products. All in all, while on paper the proposal seems to be clearly beneficial for consumers, from the perspective of companies, it raises numerous doubts. Moreover, one cannot exclude that difficulties in enforcing a new misleading practice may render the consumers’ benefits fictitious.